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Tuesday, 18 October 2011

"Plenty of Fish" and "Plenty More Fish" - these are fundamental principles which the IPKat has long cherished. So the IPKat was intensely gratified to see that no less an august person than HHJ Colin Birss had finally given judicial consideration to these delicious twin subjects.

"I'd eat it," says the IPKat, "not date it."

The IPKat's inevitable disappointment, on discovering that the Judge's latest decision (Plentyoffish v Plenty More) was not in fact about piscine delicacies, was somewhat tempered by the fact that it was a decision about passing off - a subject the IPKat finds almost equally fascinating. And the judgment does contain a picture of a fish (right).

The question Judge Birss had to determine, sitting as a judge of the High Court, was this: in order to demonstrate goodwill in the UK as a prerequisite for a passing off action, is it necessary that the business actually has customers in the UK?

The PLENTYMOREFISH logo shown above was registered by Plenty More LLP as a trade mark in respect of dating services. Plentyoffish Media Inc. applied to invalidate this registration on the ground that use of the mark would be liable to constitute passing off (s.5(4) of the Trade Marks Act 1994 or Art. 8(4) of the CTM Regulation).

Plentyoffish contended that it had goodwill in the sign "Plenty of Fish" (and "plentyoffish" and "plentyoffish.com", the latter being the domain of their dating website), and claimed that use of the PLENTYMOREFISH mark would constitute passing off. Plenty More's case was that Plentyoffish had no customers in the UK, and therefore could not demonstrate the goodwill necessary as an essential element for a passing off action.

Plentyoffish lost before the Trade Marks Registry despite providing evidence that its website, plentyoffish.com, had the second-highest number of UK visitors among dating websites and was in the top 150 of all websites in terms of UK visitors - a figure of 4 million UK visitors to the site being suggested in evidence. However, in spite of these impressive numbers, it failed to submit any evidence that it had even a single UK subscriber for its dating services.The Hearing Officer, Mr Landau, noted that while it would have been a trivial matter for Plentyoffish to prove the existence of a UK customer base in evidence, if such customers existed, it had signally failed to provide any such evidence, a fact described as "startling, taking into account the nature of the claims and the nature of the business". It appeared also (and this was not apparently refuted), that at the relevant date it was not even possible for a UK visitor to the site to join and avail of the dating services.

On appeal, HHJ Birss reviewed the case law on passing off, in particular the line of authorities dealing with foreign businesses not trading in the UK but having some reputation with the UK public, beginning with the Crazy Horse case, through Pete Waterman and Budweiser/Budvar right up to the 2010 decision of Lloyd LJ for the Court of Appeal in Hotel Cipriani v Cipriani (Grosvenor Street).

In Hotel Cipriani, Lloyd LJ had reviewed the line of authorities and concluded that "an undertaking which seeks to establish goodwill in relation to a mark for goods cannot do so, however great may be the reputation of his mark in the UK, unless it has customers among the general public in the UK for those products."

Michael Edenborough QC, counsel for Plentyoffish, gamely argued that the Court of Appeal in Hotel Cipriani was "just wrong" in requiring UK customers as a necessary precondition for goodwill in the UK, and claimed that the reasoning employed by Lloyd LJ was flawed, in particular because the analysis of the Budweiser/Budvar decision did not support the conclusions reached. HHJ Birss not only found that Hotel Cipriani was binding on him, but also offered the view that its reasoning was in fact correct. HHJ Birss concluded therefore that:

"a reputation in the UK is not sufficient, customers in the UK are required and that is so whether the business provides products or services."

Plentyoffish also relied on a 1980 High Court decision, BBC v Talbot, which (it was argued) flatly contradicted the proposition that UK customers were necessary for UK goodwill to exist. In that case, the BBC was found to have goodwill in respect of the brand for a product which had not yet been released but which had been advertised widely. However, HHJ Birss agreed with Fiona Clark (for Plenty More) that the BBC case involved a different pattern of facts from the Hotel Cipriani line of case law: it was not concerned with assessing goodwill in a scenario where there was no UK business at all, but instead dealt with a long-established UK business claiming goodwill in an advertised product before its actual release date.

Finally, Plentyoffish argued, rather inventively, that because its website and dating service is free to use and makes its money from exposing viewers to advertisements, the UK customers who viewed these ads earned money for the business and thus could be regarded as customers "in an extended sense". While the argument may have been novel, it did not succeed. HHJ Birss went back to basics by focusing on what this case was actually about - a trade mark for dating services:

"It seems to me that for a member of the public to be a customer, no matter how far that concept is stretched, there still has to be some provision of the services in question. The Appellant is not seeking to invalidate a trade mark registered for advertising services nor is the Appellant claiming a goodwill or reputation in advertising. This case is about dating services. The Appellant's problem is that it has not shown that it provided any dating services to anyone in the UK on or before April 2007. "

Because no goodwill was established at the date of filing of the PLENTYMOREFISH trade mark application in April 2007, a subsidiary point on whether this was indeed the relevant date for establishing goodwill (or whether it had to be established as of an earlier date) did not need to be decided.

This Plentyoffish decision was decided in the High Court of England & Wales. The Hotel Cipriani case (stating that customers were necessary for goodwill) was decided in the Court of Appeal (which is the immediately higher court in the appeal chain).

Under the doctrine of precedent in England & Wales, decisions of the Court of Appeal and Supreme Court (formerly the House of Lords) act as binding authority on the High Court, assuming that the reasons for the higher court decision also apply on the facts of the case before the lower court.

So once the High Court judge finds that there is a binding precedent from a higher court, he has no choice other than to follow it. Judge Birss's decision can be appealed to the Court of Appeal and then possibly to the Supreme Court. Either of these courts could choose not to follow Hotel Cipriani.

David Brophy describes the procedural answer to m's question. In practice, there are a number of ways to avoid following an earlier precedent-setting decision, the normal one being to "distinguish" it, i.e. say that the facts of the later case are different from the earlier one, so the rule set in the earlier one does not apply. In the case being reported here, I don't think the judge did think the rule was wrong, so he was quite happy to follow it.

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